More than 30 percent of participants have dropped out of the Government's Mana in Mahi programme that helps young people get into jobs.
Details of the programme - which gives employers funding and support to hire young people - were revealed at the Social Development select committee on Wednesday.
A document on the scheme's progress shows that as of June 30, 168 of the 247 participants remained in the programme - that represents a 32 percent dropout.
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Despite the dropouts, Social Development Minister Carmel Sepuloni said the results of the programme have "been quite good" so far.
She said there has been a good take-up of employers being part of the programme, and that the "aim is to eventually get to the 2000 mark [of participants]".
National's Social Development spokesperson Louise Upston said the fact 32 percent of participants dropped out shows it's not as successful as Sepuloni claims.
"Given that the anticipation is to increase participation to 2000 placements, what are you forecasting the dropout rate to be?" she asked the minister.
"We're not going to forecast a failure," Sepuloni replied. "This isn't necessarily the fault of a young person.
"We've got examples already of where employers have had to let them go because of their own business situation.
"And some people who have taken a placement have felt it's not for them. It's about not dropping the ball with them and sticking with these young people."
Upston pointed out that the 247 participants in the programme is a small number compared to the roughly 27,000 18-24-year-olds on jobseeker support.
Sepuloni responded: "This is why phase two is going to be really important with regards to Mana in Mahi."
"We're dealing with young people with complex needs and so we anticipated that this was something we were going to need to work through."
The minister said the programme is "not the only place where we want to do work", and pointed to a reduction in the number of youth service payments, which she labelled "positive".
"So far the retention rate has been promising, but we know that there's plenty of work to do in that space and we'll continue to do that," Sepuloni said.
"If you've got 70 percent that are sticking in those jobs, then that's good."
The overall number of people on benefits in New Zealand has increased by 15,000 since the Government took office in 2017.
The Mana in Mahi programme had a target of 150 placements in 2018/19, and an additional 1850 placements across the following four years.
The majority of participants in the programme have been in Auckland. The rest are in Taranaki, Whanganui, Waikato, East Coast and Wellington.
To partake in Mana in Mahi, you need to be 18-24 and have been on a benefit for at least the past three months.
The programme promises at least 30 hours of paid full-time work a week, training for an industry qualification, and things to help get you started, such as new clothes.
If you stick at it, you'll also get an extra $1000 every three months for the first year.